Transcript No Slide Title

Chapter 13
Marketing Industrial
Products and Services
Major Categories U.S. Exports
13-2
Category
Services Total
Travel (hotels, etc)
Percentage
28.5
8.7
Transportation (fares, freight, and port services)
7.5
Commercial, professional, and technical services (advertising,
accounting, legal, construction, engineering)
1.7
Financial services (banking and insurance)
1.5
Education and training services (most foreign student tuition)
1.0
Entertainment (movies, books, records)
0.8
Other categories (telecommunications, information, health care)
7.3
Irwin/McGraw-Hill
Source: U.S. Department of Commerce, http://www.doc.gov. 2001
Major Categories U.S. Exports
13-3
Category
Merchandise Total
Food, feeds, and beverages (wheat, fruit, meat)
Industrial supplies (crude oil, plastics, chemicals, metals)
Percentage
71.5
4.8
15.1
Capital goods (construction equipment, aircraft, computers
telecommunication)
32.1
Automotive vehicles, engines, and part
7.7
Consumer goods (pharmaceuticals, tobacco, toys, clothing)
8.2
Other categories
3.6
Irwin/McGraw-Hill
Source: U.S. Department of Commerce, http://www.doc.gov. 2001
Marketing Industrial
Products and Services
I. Easier Standardization
1) Consumed by Businesses
2) Industrial Buyers seek profit
II. Volatility of the Industrial Market
1) Buyers Act in Concert
2) Derived Demand
Derived Demand
Time Consumer Demand for Premolded
Period
Fiberglass Shower Stalls
Year
Previous
Year
Current
Year
Net
Change
Number of Machines in Use
to Produce the Shower Stalls
Previous
Year
Demand for the
Machine
Net
Current
Year Change Replacement New Total
1
100,000
100,000
-
500
500
-
50
-
2
100,000
110,000
+10,000
500
550
+50
50
50
100
3
110,000
115,000
+5,000
550
575
+25
50
25
75
4
115,000
118,000
+3,000
575
590
+15
50
15
65
5
118,000
100,000
-18,000
590
500
-90
-
-40
-40
6
100,000
100,000
-
500
500
-
10
-
SOURCE: Adapted from R.L. Vaile, E.t.Grether, and R. Cox, Marketing in the American Economy
(New York: Ronald Press, 1952), p.16. Appears in Robert W. Hass, Business Marketing, 6th edition
(Cincinnati, OH: Southwestern, 1995) p.115
50
10
Marketing Industrial
Products and Services
• Managing Volatility
- Maintaining broad product lines
- Raise prices faster
- Reduce advertising expenditures
- Stability as a goal
Marketing Industrial
Products and Services
III. The Industrial Product-Market
1)
2)
3)
4)
5)
6)
Stages of Economic Development
Technology and Market Demand
Attributes of Product Quality
Quality Defined by the Customer
Service & Replacement Parts
Lack of Universal Standards
Stages of Economic Development
• Pre-Industrial or Commercial
• Primary Manufacturing Concerned
With The Partial Processing of Raw
Materials and Resources
• Growth of Manufacturing Facilities
for Non-Durable and Semi-Durable
Consumer goods
• Well Industrialized Economy
• Complete Industrialization
ISO 9000
ISO 9000 is the registration and certification of a
13-7
manufacturer’s quality system. It relates to generic
system standards that enable a company through a mix of
internal and external audits, to provide assurance that it
has a quality control system. It is a certification of the
production process only, and does not guarantee that a
manufacturer produces a “quality” product or service.
Irwin/McGraw-Hill
Service Opportunities in Global Markets
• American airlines are falling all over
themselves to capture greater shares of the
fast expanding Latin American travel market
through investments in local carriers.
• Insurance sales are also burgeoning in Latin
America with joint ventures between local and
global firms making the most progress.
• Banking in China is about to undergo a
revolution with National Cash Register ATMs
popping up everywhere.
Service Opportunities in Global Markets
• Merrill Lynch is going after the investmenttrust business expected to take off after Japan
allows brokers to enter that business for the
first time in 1998.
• Foreign students spend some $7 billion a
year in tuition to attend American universities
and colleges.
• American engineering consulting firms will
provide services to design and manage
construction of more than $1 trillion worth of
infrastructure development worldwide during
the next decade.
Service Opportunities in Global Markets
• Currently phone rates in markets such as
Germany, Italy and Spain are so high that
American companies cannot maintain toll-free
information hotlines or solicit phone-order
catalogue sales.
• “Xena,” “Hercules” and comparably
“dumbed-down” (i.e, heavy on action,
violence and sex) video-game heroes are
conquering electronic screens worldwide.
Marketing Industrial
Products and Services
IV. Relationship Marketing in Industrial
Markets
Reading Industrial Customers
 Print Advertising
13-9
 Catalogs
 Websites
 Direct Mail
 Trade Shows/Fairs
Irwin/McGraw-Hill
Percentage of Media Budget Spent on
Participation in Trade Events
U.S.
5%
13-10
Europe
Irwin/McGraw-Hill
22%